Ascaris Mayo v. Wisconsin Injured Patients and Families Compensation Fund
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Opinions
PATIENCE DRAKE ROGGENSACK, C.J.
*684¶1 Our review considers whether the legislatively-enacted cap of $750,000 (the cap) on noneconomic damages for victims of medical malpractice that is set out in
¶2 We conclude that rational basis is the proper standard by which to judge the constitutionality of
¶3 Therefore, we reverse the court of appeals and remand to the circuit court to impose the $750,000 cap on noneconomic damages.
I. BACKGROUND
A. The Guaranteed Payment System
¶4 In 1975, as a result of what was deemed to be a "medical malpractice crisis," the legislature established a comprehensive system of guaranteed payments and controlled liability. The Wisconsin Injured Patients and Families Compensation Fund (the Fund) was created at that time as part of the legislature's comprehensive system. Wis. Patients Comp. Fund v. Wis. Health Care Liab. Ins. Plan,
¶5 Chapter 655 "provide[s] the exclusive procedure for a person to pursue a malpractice claim against a health care provider." Rouse v. Theda Clark Med. Ctr., Inc.,
¶6 The combination of required insurance and required assessments by the Fund, which health care providers must pay, creates a mechanism for guaranteed payment to those who are injured by medical malpractice. This is so because the Fund pays medical malpractice claims in excess of the health care provider's insurance coverage amount.
¶7 In regard to those injured by medical malpractice, the Fund guarantees payment of 100 percent of all settlements and judgments for economic damages arising from medical malpractice. However, payments by the Fund for noneconomic damages are limited to $750,000 for each claim.6
¶8 From the time the Fund was created, July 1, 1975, until March of 2005,8 the Fund paid approximately $586,300,000 in claims. Morgan
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PATIENCE DRAKE ROGGENSACK, C.J.
*684¶1 Our review considers whether the legislatively-enacted cap of $750,000 (the cap) on noneconomic damages for victims of medical malpractice that is set out in
¶2 We conclude that rational basis is the proper standard by which to judge the constitutionality of
¶3 Therefore, we reverse the court of appeals and remand to the circuit court to impose the $750,000 cap on noneconomic damages.
I. BACKGROUND
A. The Guaranteed Payment System
¶4 In 1975, as a result of what was deemed to be a "medical malpractice crisis," the legislature established a comprehensive system of guaranteed payments and controlled liability. The Wisconsin Injured Patients and Families Compensation Fund (the Fund) was created at that time as part of the legislature's comprehensive system. Wis. Patients Comp. Fund v. Wis. Health Care Liab. Ins. Plan,
¶5 Chapter 655 "provide[s] the exclusive procedure for a person to pursue a malpractice claim against a health care provider." Rouse v. Theda Clark Med. Ctr., Inc.,
¶6 The combination of required insurance and required assessments by the Fund, which health care providers must pay, creates a mechanism for guaranteed payment to those who are injured by medical malpractice. This is so because the Fund pays medical malpractice claims in excess of the health care provider's insurance coverage amount.
¶7 In regard to those injured by medical malpractice, the Fund guarantees payment of 100 percent of all settlements and judgments for economic damages arising from medical malpractice. However, payments by the Fund for noneconomic damages are limited to $750,000 for each claim.6
¶8 From the time the Fund was created, July 1, 1975, until March of 2005,8 the Fund paid approximately $586,300,000 in claims. Morgan,
¶9 When the Fund was created in 1975, there was no cap on noneconomic damages. It was not until 1986 that the legislature capped noneconomic damages. The 1986 cap was $1 million. 1985 Wis. Act 340, §§ 30, 72. The initial cap expired on January 1, 1991.
¶10 After the expiration of the 1986 cap on noneconomic damages, the cost of insurance for health care providers rose, as did health care costs. See *686Maurin v. Hall,
¶11 The $350,000 cap remained in place until we concluded that it was unconstitutional in Ferdon.9 Following Ferdon, the legislature acted to impose the $750,000 cap on noneconomic damages that is before us. 2005 Wis. Act 183, §§ 1, 7. For all other damages, payment is guaranteed to the injured party for 100 percent of a judgment or settlement.
¶12 In creating the $750,000 cap for noneconomic damages, the legislature undertook substantial investigative efforts to assure that any future legislation in regard to a cap would be constitutionally appropriate. The assembly established a "Medical Malpractice Task Force" with the aim of implementing revisions to the law in response to the court's Ferdon decision. The task force found that noneconomic damages are an aspect of recovery that often is based on emotion and not on any predictable standard. The task force said that "[a] reasonable cap on noneconomic damages serves as a rational balance [in] the Legislature's plan to ensure that successful malpractice plaintiffs are able to recover appropriate damages." Further, "[m]edical liability reform is part of a broad legislative strategy designed to keep health care affordable and available in Wisconsin." "[C]apping noneconomic damages for unquantifiable harms while continuing to allow unlimited recovery for economic damages is crucial to this strategy."
¶13 Sixty-two members of a bipartisan committee of the legislature submitted new legislation that would increase the cap to $750,000. See 2005 AB 1073, §§ 1, 7. Hearings then were held, and testimony was provided both for and against the $750,000 cap.
¶14 The legislature carefully set out its objectives, stating that "[t]he objective of the treatment of this section is to ensure affordable and accessible health care for all of the citizens of Wisconsin while providing adequate compensation to the victims of medical malpractice." 2005 Wis. Act 183, § 3. Further, the legislature codified its reasoning by which "[e]stablishing a limitation on noneconomic damage awards accomplishes the objective:"
1. Protecting access to health care services across the state and across medical specialties by limiting the disincentives for physicians to practice medicine in Wisconsin, such as the unavailability of professional liability insurance coverage, the high cost of insurance premiums, large fund assessments, and unpredictable or large noneconomic damage awards, as recognized by a 2003 U.S. congress joint economic committee report, a 2003 federal department of health and human services study, and a 2004 office of the commissioner of insurance report.
2. Helping contain health care costs by limiting the incentive to practice defensive medicine, which increases the cost of patient care, as recognized by a 2002 federal department of health and human services study, a 2003 U.S. congress joint economic committee report, a 2003 federal government accounting office study, and a 2005 office of the commissioner of insurance report.
*6873. Helping contain health care costs by providing more predictability in noneconomic damage awards, allowing insurers to set insurance premiums that better reflect such insurers' financial risk, as recognized by a 2003 federal department of health and human services study.
4. Helping contain health care costs by providing more predictability in noneconomic damage awards in order to protect the financial integrity of the fund and allow the fund's board of governors to approve reasonable assessments for health care providers, as recognized by a 2005 legislative fiscal bureau memo, a 2001 legislative audit bureau report, and a 2005 office of commissioner of insurance report.
¶15 Act 183 also said that "the limitation of $750,000 represents an appropriate balance between providing reasonable compensation for noneconomic damages associated with medical malpractice and ensuring affordable and accessible health care," and that "[t]his finding is based on actuarial studies provided to the legislature, the experiences of other states with and without limitations on noneconomic damages associated with medical malpractice, the testimony of experts, and other documentary evidence presented to the legislature." 2005 Wis. Act 183, § 3. Finally, the legislature noted that "the number chosen is neither too high nor too low to accomplish the goals of affordable and accessible health care, is a reasonable and rational[ ] response to the current medical liability situation, and is reasonably and rationally supported by the legislative record."
¶16 The $750,000 cap remained in effect until the court of appeals held it unconstitutional in this action.
B. The Mayos
¶17 This action arose after Ascaris Mayo made two trips to two emergency rooms in May 2011. On the first occasion, she visited the emergency room at Columbia St. Mary's Hospital in Milwaukee after experiencing abdominal pain and a high fever. She was seen by a physician and a physician's assistant and was advised to follow up with her gynecologist because she had a history of uterine fibroids. The next day, Ascaris Mayo went to a different emergency room where she was diagnosed with sepsis that was caused by an untreated infection. As the result of sepsis, many of her organs failed and all four of her limbs developed dry gangrene, necessitating amputation.
¶18 In June of 2012, the Mayos sued in Milwaukee County Circuit Court alleging medical malpractice and failure to provide proper information. Their claims were tried to a jury. Neither the physician nor the physician's assistant who saw Ascaris Mayo at Columbia St. Mary's emergency room was found to have been negligent. The jury did find, however, that neither provider gave Ascaris Mayo adequate information regarding alternate diagnoses and options for treatment of the alternate diagnoses. In addition to economic damages totaling $8,842,096,10 the jury awarded noneconomic damages of $15,000,000 to Ascaris Mayo11 and $1,500,000 to her husband.12
*688¶19 After the verdict was issued, the Fund moved to reduce the jury's noneconomic damage award to $750,000 as required by the cap. The Mayos also made motions after verdict, moving for entry of judgment on the verdict, as well as for declaratory judgment that
¶20 The circuit court held that the cap was not facially unconstitutional, but concluded that it was unconstitutional as applied to the Mayos on equal protection and due process grounds. In reaching its conclusion, the circuit court relied on the court's decision in Ferdon.
¶21 The court of appeals, in a published opinion, affirmed the jury's noneconomic damage award, but on a different basis. The court of appeals "conclude[d] that the statutory cap on noneconomic damages is unconstitutional on its face because it violates the same principles our supreme court articulated in [ Ferdon ], by imposing an unfair and illogical burden only on catastrophically injured patients, thus denying them the equal protection of the laws." Mayo v. Wis. Injured Patients and Families Comp. Fund,
II. DISCUSSION
¶22 The Mayos challenge the facial constitutionality of the cap and as the cap is applied to them. They claim that the classification for those who suffer noneconomic damages in excess of the cap violates their right to due process and equal protection. The Mayos also argue that the cap is unconstitutional as applied to them because of the dramatic decrease to their noneconomic damages award. The Fund, however, contends that under a rational basis review, the $750,000 cap survives constitutional scrutiny.
A. Standard of Review
¶23 A facial challenge to the constitutionality of a statute presents a question of law that we review independently, while benefitting from the court of appeals' and the circuit court's discussions. Milwaukee Branch of NAACP v. Walker,
B. General Principles of Constitutional Review
¶24 There are two general types of constitutional challenges to statutes: facial and as-applied. League of Women Voters of Wis. Educ. Network, Inc. v. Walker,
A party may challenge a law ... as being unconstitutional on its face. Under such a challenge, the challenger must show that the law cannot be enforced "under any circumstances." ... In contrast, in an as-applied challenge, we assess the merits of the challenge by considering *689the facts of the particular case in front of us, "not hypothetical facts in other situations." Under such a challenge, the challenger must show that his or her constitutional rights were actually violated.
¶25 In either type of constitutional challenge, we presume that the statute is constitutional. League of Women Voters,
¶26 Our presumption of constitutionality is based on respect for a co-equal branch of government and its legislative acts. Dane Cty. Dep't of Human Servs. v. Ponn P.,
¶27 A party challenging the constitutionality of a statute bears a very heavy burden in overcoming the presumption of constitutionality. League of Women Voters,
¶28 Generally, Wisconsin courts have employed two levels of scrutiny when addressing equal protection challenges. Thorp v. Town of Lebanon,
¶29 The more common level of statutory scrutiny is rational basis scrutiny, where statutes are upheld if there is any rational basis for the legislation. Id."The basic test is not whether some inequality results from the classification, but whether there exists any reasonable basis to justify the classification."
¶30 In Ferdon, the majority opinion spent many paragraphs discussing rational basis and concluding that strict scrutiny was not appropriate in assessing the then $350,000 cap on noneconomic damages. Ferdon,
¶31 The court gave this new level of scrutiny no standards by which to determine whether it should be applied; but instead, overturned the then existing cap on noneconomic damages through application of the majority's policy choice for Wisconsin. For example, the court opined that "[a] cap on noneconomic damages diminishes tort liability for health care providers and diminishes the deterrent effect of tort law." Id., ¶ 89. In concluding that the legislature's policy choice was constitutionally flawed, the majority opinion said, "[t]he legislature enjoys wide latitude in economic regulation. But when the legislature shifts the economic burden of medical malpractice from insurance companies and negligent health care providers to a small group of vulnerable, injured patients, the legislative action does not appear rational." Id., ¶ 101. The majority did not consider that part of the legislative plan that guaranteed 100 percent payment of all other damages, a benefit that no other tort carries. Accordingly, the test for rational basis with teeth is whether the petitioner's claim is in line with the Ferdon majority's policy choice for Wisconsin.
¶32 We hereby overrule Ferdon. Rational basis with teeth has no standards for application, usurps the policy forming role of the legislature and creates uncertainty under the law. Ferdon also creates new doctrine when it holds that "[a] statute may be constitutionally valid when enacted but may become constitutionally invalid because of changes in the conditions to which the statute applies. A past crisis does not forever render a law valid." Id., ¶ 114. There is no law to support this extraordinary declaration and we overrule it as well as "rational basis with teeth."
C. Facial Challenge
¶33 When a party challenges a law as being unconstitutional on its face, he or she must show that the law cannot be enforced "under any circumstances." Wood,
¶34 The Mayos argue that the cap on noneconomic damages in the context of medical malpractice "attempt[s] to resolve a perceived societal problem on the backs of the few, most severely injured, victims of medical malpractice." Because of this alleged disparate treatment under the cap, the Mayos say that their rights to equal protection and due process have been violated.
¶35 Article I, Section 1 of the Wisconsin Constitution provides that:
All people are born equally free and independent, and have certain inherent rights; among these are life, liberty and the pursuit of happiness; to secure these rights, governments are instituted, deriving their just powers from the consent of the governed.
Article I, Section 1 has been interpreted as providing the same equal protection and due process rights afforded by the Fourteenth *691Amendment to the United States Constitution.14 State ex rel. Sonneborn v. Sylvester,
¶36 When a party makes a facial challenge, he or she bears a heavy burden because "legislative enactments are presumed constitutional, and we will resolve any reasonable doubt in favor of upholding the provision as constitutional." Bostco LLC,
¶37 In bringing an equal protection challenge, the challenging party must show that the statute "treats members of similarly situated classes differently." Castellani v. Bailey,
¶38 With regard to due process, "[t]he touchstone of due process is protection of the individual against arbitrary action of government." Wolff v. McDonnell,
¶39 While equal protection and due process challenges may have different implications, "[t]he analysis under both the due process and equal protection clauses is largely the same." State v. Quintana,
¶40 Having determined that we apply rational basis review, we must now determine whether the legislature had a rational basis for enacting the cap. In our rational basis review, we consider not "whether some inequality results from the classification, but whether there exists any reasonable basis to justify the classification." Bostco LLC,
*692and bears no rational relationship to a legitimate government interest." Smith,
¶41 A statute is unconstitutional under rational basis scrutiny if the legislature "applied an irrational or arbitrary classification when it enacted the provision." Aicher,
¶42 A classification created by legislative enactment will survive rational basis scrutiny upon meeting five criteria:
(1) All classification[s] must be based upon substantial distinctions which make one class really different from another.
(2) The classification adopted must be germane to the purpose of the law.
(3) The classification must not be based upon existing circumstances only. [It must not be so constituted as to preclude addition to the numbers included within a class.]
(4) To whatever class a law may apply, it must apply equally to each member thereof.
(5) That the characteristics of each class should be so far different from those of other classes as to reasonably suggest at least the propriety, having regard to the public good, of substantially different legislation.
Id., ¶ 58 (quoting Dane Cty. v. McManus,
¶43 When we apply five-step rational basis scrutiny, as we explain further below, we conclude that the legislature's comprehensive plan that guarantees payment while controlling liability for medical malpractice through the use of insurance, contributions to the Fund and a cap on noneconomic damages has a rational basis. Therefore, it is not facially unconstitutional.
¶44 First, we determine whether the classification of those who have greater than $750,000 in noneconomic damages is substantially different from the class of injured patients who have less than $750,000 of noneconomic damages. Aicher,
¶45 Second, Chapter 655 of the Wisconsin Statutes creates a comprehensive plan for claims of medical malpractice in Wisconsin. Included in this plan is the right to guaranteed payment of unlimited damages for economic losses, as well as past and future health care costs.
¶46 When the legislature enacted Chapter 655 in 1975, it also made a number of legislative findings. We will not relate them here because the legislature took a fresh look at medical malpractice damages in amending Chapter 655 after this court's decision in Ferdon. In so doing, the legislature placed its policy rationale within the statutes so that it would be clearly understood.
¶47 The legislature stated that the fund was "established to curb the rising costs of health care by financing part of the liability incurred by health care providers as a result of medical malpractice claims and to ensure that proper claims are satisfied."
The objective of the treatment of this section is to ensure affordable and accessible health care for all of the citizens of Wisconsin while providing adequate compensation to the victims of medical malpractice. Achieving this objective requires a balancing of many interests. Based upon documentary evidence, testimony received at legislative hearings, and other relevant information, the legislature finds that a limitation on the amount of noneconomic damages recoverable by a claimant or plaintiff for acts or omissions of a health care provider, together with mandatory liability coverage for health care providers and mandatory participation in the injured patients and families compensation fund by health care providers, while compensating victims of medical malpractice in appropriate circumstances by the availability of unlimited economic damages, ensures that these objectives are achieved. Establishing a limitation on noneconomic damage awards accomplishes the objective by doing all of the following:
1. Protecting access to health care services across the state and across medical specialties by limiting the disincentives for physicians to practice medicine in Wisconsin, such as the unavailability of professional liability insurance coverage, the high cost of insurance premiums, large fund assessments, and unpredictable or large noneconomic damage awards, as recognized by a 2003 U.S. congress joint economic committee report, a 2003 federal department of health and human services study, and a 2004 office of the commissioner of insurance report.
2. Helping contain health care costs by limiting the incentive to practice defensive medicine, which increases the cost of patient care, as recognized by a 2002 federal department of health and human services study, a 2003 U.S. congress joint economic committee report, a 2003 federal government accounting office study, and a 2005 office of the commissioner of insurance report.
3. Helping contain health care costs by providing more predictability in noneconomic damage awards, allowing insurers to set insurance premiums that better reflect such insurers' financial risk, as recognized by a 2003 federal department of health and human services study.
4. Helping contain health care costs by providing more predictability in noneconomic damage awards in order to protect the financial integrity of the fund and allow the fund's board of governors to approve reasonable assessments for health care providers, as recognized by a 2005 legislative fiscal bureau memo, a 2001 legislative audit *694bureau report, and a 2005 office of commissioner of insurance report.
Based on actuarial studies, documentary evidence, testimony, and the experiences of other states, the legislature concludes there is a dollar figure so low as to deprive the injured victim of reasonable noneconomic damages, and there is a dollar figure at which the cap number is so high that it fails to accomplish the goals of affordable and accessible health care. The legislature concludes that the number chosen is neither too high nor too low to accomplish the goals of affordable and accessible health care, is a reasonable and rational response to the current medical liability situation, and is reasonably and rationally supported by the legislative record.
§ 893.55(1d)(c).
¶48 The cap on noneconomic damages was driven by a number of legislative goals that were advanced by the classification: (a) lowering health care costs and insurance rates, (b) incentivizing physicians to practice in Wisconsin, (c) limiting the amount of defensive medicine practiced thereby reducing costs to patients, (d) making noneconomic damage payments to claimants more predictable thereby controlling premium adjustments to health care providers and (e) protecting the integrity of the Fund. Under a rational basis review, we do not consider whether the legislature achieved its goals. Rather, we recognize that the legislature had ample testimony before it to support its policy choices, and we will not reweigh legislative choices. See Wilkie,
¶49 By enacting the cap, the legislature made a legitimate policy choice, knowing that there could be some harsh results for those who suffered medical malpractice and would not be able to recover the full amount of their noneconomic damages. However, any cap, by its very nature, will limit the amount that some people will be able to recover. If the cap did not do so, it would have no economic effect.
¶50 It must also be noted, however, that while there is a cap on noneconomic damages, there also is a guarantee of payment for all other categories of damages that a victim of medical malpractice may be awarded. No other tort has a guarantee of unlimited payment for a jury's award of economic damages.
¶51 Because the classification created by the cap supports the purpose of the law and the legislature's overarching goal of "ensur[ing] affordable and accessible health care for all of the citizens of Wisconsin while providing adequate compensation to the victims of medical malpractice",
¶52 The legislative classification must not be based solely upon existing circumstances. Aicher,
¶53 Fourth, we consider whether the cap applies equally to the members of each class created. Id., ¶ 58. The Mayos argue that the cap does not apply equally to all members of the class whose noneconomic damages exceed $750,000 because the greater the award given, the smaller the percentage of that award that is recovered. However, contrary to the Mayos' argument, the cap on noneconomic damages remains at $750,000 regardless of whether *695an individual is awarded $750,000 or $15 million. Therefore each person for whom the cap is a factor in recovery is treated exactly the same. Their noneconomic damages will be capped at $750,000. Because each member of the class is treated precisely the same under the cap, the fourth Aicher factor is met.
¶54 Fifth, and finally, we must determine whether the characteristics of each class are so different from those of the other class to "reasonably suggest" legislation that is for the public good. Id., ¶ 58. The legislature was concerned with massive noneconomic damage awards because they are unpredictable and often based on emotion. The legislature wanted to plan for accessible health care while providing reasonable compensation for those who are injured. The legislature chose to provide a mechanism to pay 100 percent of all damages arising from medical malpractice except for noneconomic damages, on which it placed a $750,000 cap. The legislature made a rational policy choice by limiting noneconomic damages; therefore, we conclude that the fifth part of the Aicher rational basis review is satisfied.15
¶55 The party who challenges the constitutionality of a statute bears a very heavy burden in overcoming the presumption of constitutionality. The challenging party must prove that the statute is unconstitutional "beyond a reasonable doubt." League of Women Voters,
D. As-applied Challenge
¶56 As-applied challenges question the constitutionality of a statute "on the facts of a particular case or [as applied] to a particular party." Smith,
¶57 Because as-applied challenges turn on their facts, each one is different. Accordingly, we determine on a case-by-case basis whether a petitioner's constitutional rights have been transgressed. In re Gwenevere T.,
¶58 As we have mentioned above in discussing the facial constitutionality of the cap, because no fundamental right or suspect class is at issue here, we apply a rational basis review. Smith,
*696
¶59 Prior to considering the Mayos' circumstances, it is helpful to examine another as-applied challenge to the constitutionality of a statute that came before us in Blake,
¶60 We held that neither Blake's facial nor her as-applied challenge had merit. Blake asserted her right to equal protection was denied because of disparate treatment, in that others convicted of "dishonesty related offenses" did not suffer permanent denial of childcare licensure. Id., ¶ 46. We concluded, however, that Blake had "misidentifie[d] the proper scope for evaluating the classification." Id. Referring to a prior court of appeals case, we explained that the plaintiff identified "no evidence that she was treated differently from any similarly-situated childcare provider whose license was revoked under the new law." Id. (quoting Brown v. DCF,
¶61 As with the plaintiff in Blake, the Mayos have not presented any evidence that they were treated differently than others who are similarly situated. The Mayos argue that their noneconomic damages award is reduced by 95.46 percent when the cap is applied. However, as with the plaintiff in Blake, the Mayos focus their attention on themselves as opposed to analyzing whether they are treated differently than other similarly-situated persons.
¶62 The Mayos were treated the same under the cap as any other persons for whom the jury has awarded noneconomic damages in excess of $750,000. The cap applies regardless of how much in excess of $750,000 the award; how drastic the injury suffered; the gender, age, or race of the plaintiff; or the extent of a health care provider's culpability. The Mayos certainly are very sympathetic plaintiffs because of the severe injuries that Ascaris Mayo has suffered. However, were we to construe the cap based on our emotional response to her injury, we would be substituting our policy choice for that of the legislature.
¶63 Further, the Mayos have not shown that the cap as applied to them is "arbitrary and not rationally related to a legitimate government interest." Smith,
¶64 Furthermore, the Wisconsin Constitution permits the legislature to eliminate common law causes of action altogether. Under Article XIV, Section 13 of the Wisconsin Constitution, the common law may be "altered or suspended by the legislature." A prominent example is worker's compensation, where the legislature has eliminated claims for noneconomic damages by workers against their employers. See
¶65 Because we conclude that the $750,000 cap on noneconomic damages established by
III. CONCLUSION
¶66 We conclude that rational basis is the proper standard by which to judge the constitutionality of
¶67 Therefore, we reverse the court of appeals and remand to the circuit court to impose the $750,000 cap on noneconomic damages.
By the Court. -The decision of the court of appeals is reversed and the cause is remanded to the circuit court.
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